Friday, September 23, 2016

Shipping: AP Moller-Maersk Break-up, Hanjin Breakdown

When Danish businessman Maersk McKinney Moller was 94, he ordered a new yacht for delivery in two years’ time.

It
was typical of the long-term view that Moller, who died aged 98 in
2012, took in both his personal and business life. He spent more than 50
years helping to build AP Moller-Maersk into a conglomerate — spanning the world’s biggest container shipping line, oil exploration, drilling rigs and port terminals.

Since the death of Moller — who was at various times chief executive,
chairman and head of the main shareholder at Maersk — the influence of
his family has seemed to wane.

But, as the group takes its biggest strategic decision in decades — to break itself up — there are growing signs of the founding family reasserting control over Denmark’s biggest company by revenue.

“The family were pretty quiet for a few years,” says one senior Maersk manager. “But now we feel their influence much more.”

That influence has played out in Thursday’s move to split Maersk in
two: a new transport and logistics business that will form the core of
the company, and an energy unit that could be spun off, sold, or used
for joint ventures.

...MUCH MORE
And from the FT's flagship Alphaville blog (see what I did there?):

The order of claim seniority is cargo, crew, supplier,
mortgage holder. What is unique is a claim against a company or vessel
can be enforced against a different asset or bank account. This allows
creditors greater scope but also can generate a blizzard of litigation.

In a typical but very simplified case: 1) a mortgage holder receives a
judgment in local court for non payment; 2) checks to see where any
debtor vessels are steaming; 3) goes to that port with a lawyer and
replacement crew; 4) court accepts the judgment; 5) port sheriff,
lawyer, and replacement crew “physically” arrest the vessel, pay off the
existing crew, cover supplier claims, and deliver the cargo if the
vessel is not empty. Problem is the mortgage holder now owns a ship, and
that costs cash money every day. If the vessel is not marketable, there
usually is an “as is” auction under port sheriff supervision.

And South Korea’s Hanjin Shipping — which filed for bankruptcy last month after assumed government support didn’t materialise — is rather more complicated than that simplified case.

As the FT said,
“Hanjin’s move to seek bankruptcy protection last month was the first
time a big container shipping line had done so for 30 years, and it
caught out many in the industry....MORE